Construction companies failing

[Temp]

Take care now..

 

https://www.cityam.com/uk-construction-companies-collapse-in-their-hundreds-as-costs-rise/

 

"The latest government insolvency data shows that between August and October 2021 797 construction firms went bust...."

“With costs escalating and labour problems intensifying, it’s little surprise that almost a quarter of firms say turnover has decreased and more companies are going to the wall,” said Susannah Streeter, senior investment and markets analyst Hargreaves Lansdown."

 

FT has similar story blaming increased costs and labor shortages.

 

[nod]

There’s going to be a lot of this 

Miller homes 

Story Homes and others are paying bricklaying contractors weekly 

I’ve friend who has gone from a gang to 41 bricklayers in a month Impossible to do without the weekly payments 

Not sustainable 

[ToughButterCup]

And yet , currently, you can't get  a  'White-Van-Man' for love or money.  @nod , in our sector , are individual traders (White-van-man) safe? Or are they similarly exposed?

Edited January 18, 2022 by ToughButterCup

[PeterW]

Not just small companies going -  North Midland Construction and Wildgoose have both gone in the East Mids recently. Some of it has been down to labour and material shortages and they have been held to contracts that they just couldn’t deliver in time and the penalties are pretty fierce. 
 

Some smaller outfits are more able to ride it out but I know of one working weekends just to catch up on delays on materials as they have a full 2022 order book and can’t afford any delays. 

[SteamyTea]

Economic Theory.

From WIkipedia

 

Gordon's triangle model[edit]

Robert J. Gordon of Northwestern University has analyzed the Phillips curve to produce what he calls the triangle model, in which the actual inflation rate is determined by the sum of

1. demand pull or short-term Phillips curve inflation,
2. cost push or supply shocks, and
3. built-in inflation.

The last reflects inflationary expectations and the price/wage spiral. Supply shocks and changes in built-in inflation are the main factors shifting the short-run Phillips curve and changing the trade-off. In this theory, it is not only inflationary expectations that can cause stagflation. For example, the steep climb of oil prices during the 1970s could have this result.

Changes in built-in inflation follow the partial-adjustment logic behind most theories of the NAIRU:

1. Low unemployment encourages high inflation, as with the simple Phillips curve. But if unemployment stays low and inflation stays high for a long time, as in the late 1960s in the U.S., both inflationary expectations and the price/wage spiral accelerate. This shifts the short-run Phillips curve upward and rightward, so that more inflation is seen at any given unemployment rate. (This is with shift B in the diagram.)
2. High unemployment encourages low inflation, again as with a simple Phillips curve. But if unemployment stays high and inflation stays low for a long time, as in the early 1980s in the U.S., both inflationary expectations and the price/wage spiral slow. This shifts the short-run Phillips curve downward and leftward, so that less inflation is seen at each unemployment rate.

In between these two lies the NAIRU, where the Phillips curve does not have any inherent tendency to shift, so that the inflation rate is stable. However, there seems to be a range in the middle between "high" and "low" where built-in inflation stays stable. The ends of this "non-accelerating inflation range of unemployment rates" change over time.

[markc]

We are seeing the large (top heavy) organisations are struggling while the smaller family run ones are thriving. COVID working from home doesn’t really work as a management structure for large organisations and projects. We supply spider access platforms and railway machines so our customer base is railway infrastructure, building maintenance and tree surgeons so can’t comment on house building etc.

[nod]

1 hour ago, ToughButterCup said:

And yet , currently, you can't get  a  'White-Van-Man' for love or money.  @nod , in our sector , are individual traders (White-van-man) safe? Or are they similarly exposed?

The smaller outfits are less exposed 

Cashflow is a real problem at the moment 

As with the gas industry The good times will end Its a case of when 

[Radian]

2 hours ago, ToughButterCup said:

And yet , currently, you can't get  a  'White-Van-Man' for love or money.

Why on earth would you want one of them??